How will this move affect PPC strategies?

It is likely that this move will force advertisers to increase CPCs to ensure they are consistently appearing in the top positions. Advertisers who have traditionally positioned keywords according to performance will suffer the biggest losses through this change.

Advertisers that have historically run a domination strategy will see CPCs increase as competitors raise bids in an effort to retain click volume from PPC traffic. This will result in budgets needing to be increased in order to maintain current market share.

The main impact will be on the number of visible advertisers. Dropping all but three ads below the fold is going to lead to less “real” ad impressions (by which I mean impressions that are actually seen by the user, many users never get to ads below the fold). Not having the top three or four sidebar ad positions may well lead to a rush to secure the top ads and get some real visibility, which will of course increase CPCs.

That said the side ad positions had become increasingly unattractive to users. Google’s increasing number of changes to the top ad formats to make them look more like natural results (extended headlines, adding the domain after a pipe, removing display URL capitalisation, changing the colour of the ad box, etc) have only increased the difference in CTR between top and side (and Google gave us visibility of this within Adwords to emphasise it).

Therefore I don’t think there will be too much negative impact for those advertisers in positions four and five. However the big change will be for positions seven downwards, as I’m yet to see a top and bottom ad landscape with more than six ads, meaning that those advertisers who saw value in aiming for bottom-of-first-page positions will have to change their strategy, increase their bids to top six, and this will of course inflate the landscape cost as a whole.

I think the emphasis should always be on relevance over price. I think this would drive online marketers to improve their overall campaign quality since making sure you appear above the fold becomes extremely important.

I wouldn't imagine most marketers bumping up bids in order to stay above the fold initially, although, there is the fear that if inexperienced marketers do resort to this tactic (simply increasing bids), then we may see an increase in cost per clicks.

It certainly will be interesting to see if cost per clicks do increase in the coming days, but my initial instinct is to trim the fat in all campaigns so that the "user experience" is enhanced. Hopefully sticking to this mantra should keep online marketers in good stead.

Why is Google doing this?

Elroy Condor:

Whilst I am tempted go with the standard answer of increasing Google’s revenue I’m not so sure that this will be the end result. When this change is implemented Google stands to lose revenue from at least five advertisers (assuming three ads are displayed at both the top and bottom of the page) currently appearing down the side.

Google is, however, a huge fan of testing, and it is likely that it's trying to strike the best balance between usefulness for the consumer and most commercial return for themselves (as most businesses should).

Also, with the rise of Mobile & Tablet platforms it is likely that Google is standardising the interface to ensure the user experience is consistent across all platforms.

Matt Whelan:

Google has recently been placing other content in the side bar, maps for local results are the example most people will have seen. As they increasingly verticalise and personalise the search results page, Google will be looking to place additional content in the side, which covers their traditional ad placements. One recent example is the “sources” module.
So Google needed to move the ads in order to showcase new content like this.

As to whether they monetise that content in the future, who knows, but it would be very easy to use this space for many of the comparison-based projects Google are working on (eg comparison ads, hotel finder, flight search, etc). If so Google is being very smart and making changes that will probably be perceived as positive by most users, whilst increasing the percentage of the page from which it is able to generate revenue.

Shaad Hamid:

Google claims that this would improve the "user experience" and also their experiments have shown that ads serving below the fold had a better click through rate than those served on the right hand side of the page.

However, I also think that Google may want to utilise the space on the right hand side to serve other features like "Google maps" or "sources" which is exciting. It's also interesting that this is introduced at a time when Bing, Yahoo! and AOL have formed an alliance, I don't think that this a coincidence.

Will PPC ads at the foot of the page perform better than right hand side ads?

Elroy Condor:

I severely doubt this. Between the top and the bottom of the SERP’s there are a wealth of organic search results all vying for (and in a better position to receive) the users clicks than the PPC ads at the bottom of the page.

This being the case I would be very surprised to see CTRs at the bottom of the page outperform those of the right hand side ads.

Matt Whelan:

I don’t think they’ll perform any worse. Its extremely difficult for us to test, as Google isn’t giving us side vs bottom data, but the fact of the matter is that Google wouldn’t make a change that will negatively impact its revenue. My personal opinion is that Google wouldn’t gamble on this.

Google tests new layouts and their impact on ad revenue before they are deployed, any long term impact from more aggressive bidding would have been untestable prior to the announcement, so there must have been good case for bottom ad performance at least matching side ad performance for them to warrant rolling it out.

Don’t forget Google has said that “on average [bottom ads] performed better than side ads in terms of CTR and i’m not entirely sure why so many people seem to think they would lie about this.

Shaad Hamid:

To be honest, I'd say yes. If someone has actually taken the time to scroll to the bottom of a page, chances are they haven't been convinced by any of the organic search results and haven't found what they are actually looking for.

In this instance, if ads are appealing and relevant chances are that users would click on it.

Comments (11)

The right hand ads never works better than the top ads - just above the organic listing...
It's clear that Google wants to improve the CTR for advertisers. Ads at the footer maybe perform better for Google... we will see.

Hmm I think this will be more of an experiment in the short term. This will happen but they may be testing the right hand side as a means to see how this would have a potential effect.

almost 6 years ago

Pete

I have read the announcement over at the Google blog, but nowhere do I read that ALL the ads on the right hand side are going to move to the bottom.

The exact quote: "ads that have previously shown to the side of the results may in some cases appear below them."

Key phrase: "in some cases", which usually means "most often not".

I would be very surprised to see the side ads dissappear, as this is the bread and butter for Google.

almost 6 years ago

Peter Gould, Senior PPC Analyst at Epiphany

I have to agree with Pete regarding all ads on the right hand side moving to the bottom - I would be very surprised to right hand side ads disappear altogether.

In fact, I was speaking with one of our Google contacts last week about this specifically and received this information:

Q: How many ads can show at the bottom? How many on the right-hand side now? What is the maximum number of ads on the page?

A: This launch does not affect the number of ads that may show on the RHS. Currently bottom ads are being shown for queries with fewer ads.

So from this, I interpret it as saying that where perhaps only 5-6 advertisers enter the auction for a particular term, you're likely to see those 2-3 ads at the bottom of the page instead of the right-hand side.

That said, I am still seeing some searches on very competitive terms where only bottom ads feature (despite there being in excess of 6 advertisers). However, I envisage Google are still testing these types of SERPs to test impact for users (or more cynically, the impact on their click revenues), and they haven't fully decided yet.

It is bit clear that Google want to earn more and this could be only done by improving CTR for advertisers and by decreasing the organic share of the first page.Google took the very first step by introducing shopping results for every transactional search query followed by Linking Google Adwords account with Google Merchant Account and now recently Separate bidding for Google Merchant Products via Adwords.
At the same time Google is also working to make Paid Marketing more relevant and Effective. Personalizing Paid search results is a step taken in this direction also Google is getting Strict in terms of it's Policies and Manual reviews of Ads and Landing pages increased forcing Advertisers to make necessary changes. This will change the game and would have a great impact on the SEO Industry.

almost 6 years ago

Andrew Liddell, Ecommerce Business MGR at Essential Nails

I think that Google is now badly threatened by Facebook, Bing, Yahoo etc as they have pretty much copied googles recipe fully. Even i sometimes have to move back to see its not google results!

This is Googles answer.

almost 6 years ago

Matt Whelan, Paid Search & Display Director at Guava

@PeterGould I've also seen loads of examples of bottom ads in competitive landscapes - not saying that a Google rep could be wrong, but... :)

I think you're right though, this will probably go one way or the other and Google is testing to work out the relative profitability, and to enable the testing of other content.

almost 6 years ago

Peter Gould, Senior PPC Analyst at Epiphany

@Matt - I also am seeing more and more example of competitive terms showing only with top and bottom ads. 'MW3' is a good example with it being an extremely sought after game at the moment. When I searched for it, I only saw 1 top ad, and 1 bottom ad.

Hopefully Google are only testing this still, because I can't see eliminating right-hand side ads altogether as being a great idea in the long run for Google. Yes in the short-term, CPCs may be forced up by the increased competition, but in the long-term, the profitability of campaigns will decrease, driving more advertisers and businesses away from Google.

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